Why Your Executors Cannot Access Your Crypto, and What to Do About ItWhen someone dies holding cryptocurrency, online savings accounts, or digital subscriptions, their estate faces a problem that simply did not exist a generation ago. The assets may be real and valuable. The passwords are known only to the deceased. Without the correct credentials, the funds may be irretrievable, locked behind two-factor authentication, platform terms of service, or cold storage hardware sitting in a drawer. UK law has moved faster than most people realise. HMRC confirmed in its 2024 guidance update that crypto assets including tokens, NFTs, and exchange-held holdings constitute property for inheritance tax purposes. They fall into the estate, attract IHT at 40% above the nil-rate band threshold (£325,000, frozen to April 2031), and must be declared on the IHT400 form. If executors cannot access or value those assets, they are still required to make a reasonable estimate, and they are personally liable if HMRC later determines the estate was undervalued. The practical and legal exposure is significant. This guide covers what digital assets are, how UK law treats them, and the specific steps you should take now to ensure your estate does not lose what you have accumulated.
Key facts: Digital Assets and UK Estates 2026
What Counts as a Digital Asset in Your EstateThe category is broader than most people assume. For estate planning purposes, digital assets fall into three groups: financial assets with monetary value, accounts and subscriptions with transferable or recoverable value, and purely personal assets such as photographs and messages. Financial Digital AssetsCryptocurrency, Bitcoin, Ethereum, and all other tokens, is the most significant category. Values can be substantial and highly volatile, which creates a valuation challenge for executors who may not understand the asset class. NFTs (non-fungible tokens) are also property, though their market values have fluctuated dramatically. Online savings or investment accounts (not with traditional banks) held through fintech platforms may also require specific digital estate procedures. PayPal balances, cashback accounts, and loyalty points have monetary value, some are transferable on death, some are not. Online Accounts With Recoverable ValuePremium subscriptions, Adobe Creative Cloud, Microsoft 365, and similar, are generally not transferable and lapse on death. However, prepaid balances may be recoverable. Amazon seller accounts, eBay businesses, and Etsy shops have operating value that could be significant if the deceased ran them as a commercial enterprise. Domain names and websites are property, they can be transferred or sold as part of the estate. Social Media and Personal AccountsFacebook offers a "memorialisation" option, which converts the account to a memorial page managed by a nominated legacy contact. Instagram follows similar rules. Google's Inactive Account Manager allows pre-authorised access to a named person. Apple's Digital Legacy programme, introduced in 2022, allows up to five people to be designated as legacy contacts who can access iCloud data after death. Without these designations in place, data may be permanently inaccessible. How UK Law Treats Crypto and Digital PropertyThe Law Commission's 2023 report on digital assets concluded that crypto should be treated as a third category of property, distinct from both tangible things and traditional "choses in action." While legislation implementing this recommendation is still progressing, the practical effect for estates is clear: HMRC and the courts treat cryptocurrency as property that passes on death according to the terms of the will, or under intestacy rules if there is no will. Domicile matters. If you hold crypto on a non-UK exchange but are UK-domiciled, the assets are within scope of UK IHT. HMRC's current approach is that the location of crypto assets follows the location of the holder's private key, a position with significant practical implications for cold wallet holders. Exchange-Held vs Self-Custodied CryptoThe critical distinction is whether the crypto is held on an exchange (custodial) or in a wallet controlled entirely by the holder (non-custodial). Exchange-held crypto is accessible through the exchange's bereavement process, slow and bureaucratic, but achievable with a probate grant. Non-custodial crypto held in a hardware wallet (Ledger, Trezor) or software wallet is accessible only via the seed phrase. If that seed phrase is lost, the assets are gone. No court order can recover them. This is the most important single issue in digital estate planning. What Your Will Should Say About Digital AssetsYour will should include an express clause dealing with digital assets. A simple general residue clause ("I give all my property to...") technically captures digital assets, but in practice your executor may not know they exist. The clause should do three things: acknowledge that digital assets form part of the estate, direct the executor to follow the instructions in your letter of wishes or digital asset schedule, and grant the executor explicit authority to deal with platforms on your behalf. The will should not contain passwords, seed phrases, or private keys. A will becomes a public document once probate is granted, anyone can search the probate registry and download it. Sensitive access credentials belong in a separate, secure document referenced by the will and letter of wishes. The Digital Assets ScheduleA digital assets schedule is a separate, private document, not filed with the probate registry, that lists every account, wallet, and subscription, together with the information needed to access them. Store it in a secure location: a fireproof home safe, a safety deposit box, or an encrypted password manager with access credentials given to your executor in a sealed envelope. Update it annually.
IHT Valuation of Crypto AssetsHMRC requires crypto to be valued at the date of death using the sterling equivalent at that date. Executors should obtain a contemporaneous valuation from a recognised exchange or data provider (CoinGecko, CoinMarketCap, or the exchange itself) and retain the evidence. Where markets are volatile, the date-of-death value may differ materially from the value at the time the estate is administered, HMRC does not adjust for post-death market movements unless the estate claims a loss on sale under s.178 IHTA 1984. The nil-rate band is £325,000 and the residence nil-rate band £175,000, both frozen to April 2031. For couples, the combined allowance reaches up to £1,000,000. Crypto assets exceeding these thresholds attract IHT at 40%, or 36% if 10% or more of the net estate passes to charity. The full detail of how IHT interacts with estates is covered in the UK inheritance tax 2026 guide. Practical Steps to Take NowCompile a full digital asset inventory. List every account, platform, wallet, and subscription. Include the platform name, the type of asset, an approximate value, and the access method. Secure seed phrases and private keys separately. Never store them digitally without strong encryption. A physical copy in a fireproof safe is the most resilient option for hardware wallet seed phrases. Set up platform legacy features where available. Google Inactive Account Manager, Apple Digital Legacy, and Facebook Legacy Contact are all free to configure and take minutes to set up. Reference the digital asset schedule in your will and letter of wishes. Do not include credentials in either document. Reference where the schedule can be found. Tell your executor the basics. They do not need the credentials themselves, but they need to know that digital assets exist, approximately what they are worth, and where to find the instructions. Anyone reviewing or making their will should include a digital assets clause as standard. The Make a Will Online service provides a structured approach to capturing these assets as part of the will drafting process. The wider guide to making a will online UK 2026 sets out the full process.
Verdict: Digital assets are real property with real IHT consequences, and the risk of losing them permanently is not theoretical, it happens regularly. A digital assets schedule referenced by your will, a letter of wishes that tells your executor what exists, and platform legacy features configured in advance are the three actions that prevent avoidable loss.
This article is for informational purposes only and does not constitute financial advice. Always verify rates with official sources before making any financial decision. Frequently Asked QuestionsDoes cryptocurrency go through probate in the UK?Yes. Cryptocurrency is treated as property under UK law and forms part of the deceased's estate. Exchange-held crypto can be transferred by the executor once a grant of probate has been obtained and submitted to the exchange's bereavement team. Self-custodied crypto requires access to the wallet credentials, probate alone is not sufficient. What happens to Bitcoin if I die without leaving access instructions?If your Bitcoin is held in a self-custodied wallet and no one has access to your seed phrase, the assets are irretrievably lost. No court order, no exchange intervention, and no technical process can recover assets locked in a non-custodial wallet without the seed phrase. This makes seed phrase succession planning among the most critical issues in digital estate planning. Are NFTs subject to inheritance tax?Yes. NFTs are treated as property for IHT purposes. Their value at the date of death must be declared on the IHT400. Valuation can be challenging given market volatility and illiquidity, executors should obtain a contemporaneous market value from a recognised NFT marketplace. Can I leave passwords in my will?You can, but it is inadvisable. A will becomes a public document once probate is granted, it is searchable at the probate registry. Passwords, seed phrases, and private keys should be kept in a separate, secure, private document that is referenced by the will but not filed with it. What is a digital legacy contact and do I need one?A digital legacy contact is a person you designate, through a platform's settings, to access or manage your account after your death. Apple, Google, and Facebook all offer this. It is separate from your will and operates under the platform's terms of service. Setting one up takes minutes and can save your family significant difficulty. Sources & Verification
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Digital Assets in Your Will UK, Crypto, Passwords, Online AccountsCryptocurrency, online accounts, and passwords can be lost forever if not included in your will. Here is how to protect digital assets in your UK estate in. Editorial Disclaimer The content on Kaeltripton.com is for informational and educational purposes only and does not constitute financial, investment, tax, legal or regulatory advice. Kaeltripton.com is not authorised or regulated by the Financial Conduct Authority (FCA) and is not a financial adviser, mortgage broker, insurance intermediary or investment firm. Nothing on this site should be construed as a personal recommendation. Rates, figures and product details are indicative only, subject to change without notice, and should always be verified directly with the relevant provider, HMRC, the FCA register, the Bank of England, Ofgem or other appropriate authority before any financial decision is made. Past performance is not a reliable indicator of future results. If you require regulated financial advice, please consult a qualified adviser authorised by the FCA. For readers outside the UK: content is written for a UK audience and may not reflect the laws, regulations or products available in your jurisdiction. Kaeltripton.com and its contributors accept no liability for any loss or damage arising from reliance on the information provided. |
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